Business mailers could get 1p Royal Mail discount

LONDON - Businesses using franking machines and pre-paid envelopes could be cushioned from the impact of a potential increase in the price of postage next April, Royal Mail has proposed.

The company is suggesting that it could apply a 1p discount to postage paid using franking and PPI (Printed Postage Impression) against the full price for postage paid using stamps. The reason behind the move is that the former method costs the Royal Mail less. It does not incur stamp production and retailing costs and often is not collected from post boxes.

The change would not come into effect until April 1 next year, when Royal Mail is allowed to increase its postage rates. Under its price control, the company has to publish by the end of December the prices it intends to charge from April 2005. It may put up to 2p on the price of a first-class stamp, raising the cost from 28p to 30p.

Postcomm is seeking views on the proposal by December 13, because it is deciding how to address the issue of differentiated rates for business customers for the next Royal Mail price control, expected to be effective from April 2006. It says Royal Mail is able to make such a change in the April 2005 price control.

David Robottom, the Direct Marketing Association's director of postal affairs and industry development, said: "We applaud the fact that Royal Mail is making a differential between franked business post and stamped mail. It will benefit small businesses more than the larger businesses who use Mailsort 1, 2 and 3."

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